Two days after the Gasohol Study Group of the Department of Energy filed its report this spring, DOE Secretary Charles W. Duncan Jr. got this startling advice:
Say publicly that the study was made "by a group of hastily convened individuals, some of whom may be substantially biased . . . by the fact of their personal situations."
Say also that "considerable doubt has arisen as to the method in which the group was convened" by DOE's Energy Research Advisory Board, as well as to "the selection process for the members of the group, and the objectivity and scientific basis of their report."
Finally, say that DOE will not consider the report "as a statement of this department's policy or outlook on the gasohol issue," and "indicate that you have not reviewed the report itself and will make no comment as to its content."
The advice, which Duncan didn't take, came from one of his trusted aides, E. Stevens Potts.
The study was "originally touted to be a quick look by high-level scientists at the gasohol issue," Potts wrote in a three page memo. "It now appears publicly to be just what we assumed it would be at the outset, an attempt to 'railroad' the gasohol issue by enveloping a biased and poorly substantiated report in the cloak of supposed scientific judgement of the Energy Research Avisory Board."
The study group chairman "was a paid consultant to the Major industry antagonist (Mobil Oil) against gasohol" and had been "prejudiced" against the fuel in published scientific articles, Potts wrote.
The group was structured so that the majority of actual participants in its work would be gasohol "antagonists,' he alleged. Only one member, William A. Scheller, spoke for the alcohol fuel industry and could claim substantial experience in it, he added.
Potts condemned as inaccurate and unrealistically pessimistic the report's production estimates and its calculations of energy consumed to ferment and distill ethanol, used in the production of gasohol. The Energy Research Advisory Board staff and David Pimental, the study group's chairman, however, insist that the report is "positive" about gasohol and consistent with President Carter's program for it.
Potts also complained that the group met without public announcement or participation, violated DOE rules by not having transcripts made of who said what in most of its meetings, relied mainly on its own members' published work for scientific data, and made financial projections unfavorable to gasohol although the members lacked financial expertise.
A few weeks after being formed, the study group had produced a draft report that was largely negative about gasohol -- only six months after another DOE report, developed with major public involvement over a one-year period, had been positive.
"The truly unfortunate aspect of this effort is that the manner in which it was conducted will cast doubt upon the integrity, capability and scientific independence of the Energy Research Advisory Board," Potts said. The board, called ERAB, consists of 26 Duncan appointees, mostly from corporations and universities.
The memo promptly leaded at DOE, setting off a furor, a flurry of denials, and an investigation by the House Appropriations subcommittee that controls DOE's funding. DOE is seeking a fiscal 1981 appropriation of $950,000 for ERAB.
Within 24 hours after Potts wrote the memo, Deputy Secretary John W. Sawhill dropped by a meeting of the advisory board to soothe ruffled feelings. He spoke of Potts' blunt style as "unfortunate . . . one of those things that happens in government, I am afraid."
At the same meeting, ERAB member Thomas B. Cochran, of the Natural Resources Defense Council, complained that the study group report "was put together very hurriedly" and that "the basic data . . . to support the findings," are "not really there." He also protested that he hadn't seen a draft until after it "had gone into DOE and the policy had been made."
Five days later, Duncan assured ERAB Chairman Solomon J. Buchsbaum, an executive vice president of Bell Laboratories, that he has "the highest regard for the conduct of the Gasohol Study Group and . . . full confidence in the technical expertise and intergrity of the members."
Such steps did nothing to mollify Rep. Virginia Smith (R-Neb.), a pro-gasohol Appropriations subcommittee member who successfully requested a hearing on how and why the study group, which she calls a "kangaroo court," came into being produced a report "biased against gasohol and was blessed by ERAB.
Subcommittee Chairman Tom Bevill (D-Ala.) has asked Duncan and Potts to testify at the hearing, which is set tentatively for Thursday.
Also unmollified was study group member Scheller, a University of Nebraska chemical engineering professor, investor in a gasohol venture and a personal friend of Smith.
"The report does not represent my views nor the facts about gasohol and its performance, economics and the energy balance," he wrote Potts on May 8. But for reasons that aren't clear, Scheller did not write a minority view, and voted for the recommendations in the report.
Neither Duncan nor Potts will comment now. Potts is the secretary's special assistant and moved over with him from the Pentagon last year. A few months later, Duncan detailed Potts to the Office of Alcohol Fuels as acting director.
Last November, according to ERAB executive director Thomas J. Kuehn, Buchsbaum appointed the seven members of the Gasohol Study Group in consulation with ERAB member Pimentel, a Cornell University agricultural scientist. Although overall "balance" was sought, the principal criterion for selection was technical expertise, Kuehn said.
Pimentel became the group chairman, under an ERAB rule that its members must head its task forces. Joining him were two other ERAB members and four outsiders, including Mobil Research & Development executive Paul Weiss.
Last summer and fall, Mobil Research retained Pimentel as a $500-a-day consultant to evaluate a proposal to grow more corn and sugar beets for ethanol.
Under DOE conflict-of-interest rules, an adviser must disclose, in a so-called "bias form," employment for five or more days. Mobil retained Pimentel for five days, although, he said he, worked only 4 1/2. Nevertheless, he said, he recorded the consultancy in a bias form filed Feb. 12.
But Peter D. H. Stockton, and investigator for Smith, said the form doesn't show the Mobil tie. Told of this by a reporter, Pimentel said, "I thought it did." He added that, a few days before filing the form, he had told the study group of the connection.
The study group's report looks favorably on encouraging technology to produce methanol, a different alcohol, from coal. Potts said that Mobil, while "fighting gasohol," was "simultaneously promoting the Mobil process to convert coal to methanol."